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Consumer Building

Housing Indemnity Act 1992
New Consumer Building Framework
Accredited Building Practitioners
Owner-Builders
Planning, Building and Local Government
Any Questions?
Useful Publications

The role of Consumer Affairs and Fair Trading in building is to promote fair trading by builders, protect the rights of consumers and provide information.

This website provides you with up-to-date information relating to consumer building law in Tasmania.

It also provides links to further building information including council permits, builder accreditation, dispute resolution and owner builder requirements.

HOUSING INDEMNITY ACT 1992

What is Housing Indemnity?

The most important information in the Act is as follows:

• Builders must provide consumers with a 'consumer guide' explaining the operation of the Act.
• The Act protects consumers by providing that building work must be of a certain quality or standard.  This means that a builder is responsible for defective work and for the quality of materials used.
• Work must be performed within the time frame given in any written contract, or within a responsible time.
• The amount of deposit that a builder can ask for 'up-front' and for later progress payments is limited.

Do I have to take out any insurance?

Until recently the Housing Indemnity Act 1992 made it compulsory for builders to have housing indemnity insurance for works over $12,000.

Under the Act, housing indemnity insurance covered consumers in the event that their builder died, disappeared or became insolvent.  The cost of this insurance was passed onto consumers and generally cost between $1000 - $2000.

From 1 July 2008 there will be no legal requirement to have this insurance in Tasmania.  If a consumer wishes to take out a policy then they should discuss this with their builder.

You should check with your builder that they have, as a minimum, the following insurances:

• Builder's all-risk insurance
• Public liability insurance
• Worker's compensation insurance

Your builder is usually responsible for insuring your home during construction, however this will depend upon your contractual agreement.  You should read the contract carefully to determine your responsibility.

Insurance is particularly important when renovating a home as household items can be easily damaged during the building process.

You should check with your home insurer as to whether they will cover your home for damage or loss during the construction period.

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What is the 'Consumer Guide'?

Your builder must give you a copy of 'Building or Renovating a Home? A Consumer Guide' before performing any building work on or at your home if the cost of the building work (including labour and materials) is to be more than $12,000.

 Building work includes:

• building a new house;
• extending or renovating an existing house;
• carpentry and joinery work (including built-in wardrobes);
• wall or roof cladding; window replacement; kitchen packages; and
• the dismantling, removal and installation of a relocated building.

Click here to obtain a copy of the Are you Building or Renovating a Home? A Consumer Guide

 You will need a PDF viewer such as Adobe Reader to view PDF documents. Please contact us if you have difficulty viewing or printing the document.

What are Statutory Warranties?

The Housing Indemnity Act 1992 implies certain warranties into building work contracts, even if they are not written into your contract:

• the work will be performed in a proper and skilled manner and in accordance with the plans and specifications agreed to by the parties.
• all materials supplied by the builder will be suitable for the purpose and new, unless otherwise specified.
• the work will be performed in accordance with the requirements of the Housing Indemnity Act or any other law.
• the work will be performed with reasonable diligence and in the time specified in the contact, or within a reasonable time.
• the work and any materials used in doing the work will be reasonably fit for the result that the owner made known to the builder, so as to show the owner relied on the builders skill and judgement.
  

If your builder performs work or provides materials which do not comply with the warranties then they may be breaking the law.

The benefits of the warranties are also passed onto the next owner (time limits apply).

 Do I have to pay a deposit to my builder?

In Tasmania there are maximum deposits that a builder can ask you to pay before starting building:

• If the contract price is between $12,000 and $20,000 you cannot be asked to pay more than 10% as a deposit.
• If the contract price is more than $20,000 you cannot be asked to pay more than 3% as a deposit.
• If the contract price is less than $12,000 then the Act does not apply.

These rules are regardless of what is written in your contract.

Do I have to make progress payments? 

Your builder may ask you to make progress payments.  This is so that they can pay for materials and labour as the job progresses.

The law states that the builder can only ask you for a payment that represents a genuine progress payment for works already done.  This rule applies regardless of what is written in your contract.

If you are concerned about payments and whether they represent a 'genuine progress payment' then you should discuss this matter with your builder.

A building consultant may also be able to assist in quantifying the cost of the work done.

What do I do if things go wrong?

If you have a building dispute or a problem, you should first discuss this with the other party.  If you cannot solve the problem or you need further information or advice, you can contact Consumer Affairs and Fair Trading's building dispute advisory and resolution service.

Generally, your rights under the Housing Indemnity Act are enforceable through the Magistrates Court, however it may be useful to seek advice from Consumer Affairs and Fair Trading before taking this action.

Further information on building disputes is contained in the Consumer Affairs and Fair Trading 'Building Disputes and Resolution' Facts and Information Sheet.

 You will need a PDF viewer such as Adobe Reader to view PDF documents. Please contact us if you have difficulty viewing or printing the document.

Contact us for further information on the Housing Indemnity Act or building disputes.

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NEW CONSUMER BUILDING FRAMEWORK

Consultation paper

In response to concerns about the adequacy of residential building dispute processes and mandatory housing indemnity insurance, the development of a New Consumer Building Framework (the framework) was proposed in mid 2007.  A consultation paper on the framework was released in January 2008 inviting written submissions from stakeholders and interested parties. Twenty-one submissions were received during the consultation period which closed on 15 March 2008. These submissions have been reviewed by Consumer Affairs and Fair Trading and, where possible, will be taken into account in the design and implementation of the framework.

Details of the new framework are contained in the following consultation paper:

A New Consumer Building Framework  [299 kb | 33 pages]

 You will need a PDF viewer such as Adobe Reader to view PDF documents. Please contact us if you have difficulty viewing or printing the document.

Tasmanian Government approval

The Tasmanian Government has now agreed to the drafting of a Bill to establish a legislative process that will implement the framework which includes:

1. a dispute resolution process for domestic building disputes;
2. an ability to order the rectification of defective building work;
3. implied contract terms;
4. incorporation of the mandatory information, statutory warranties, minimum deposit and  progress payment provisions currently contained in the Housing Indemnity Act 1992.

Current status of project

Consumer Affairs and Fair Trading is now in the process of preparing detailed instructions to the Office of Parliamentary Counsel for the preparation of the draft Bill and amendments to existing legislation as necessary.  Feedback on the draft Bill will be sought in due course.

Further Information

Please contact us for further information on the Housing Indemnity Act or building disputes. 

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ACCREDITED BUILDING PRACTITIONERS

Under the Building Act 2000 the following practitioners must be accredited if they are undertaking building work that requires a building permit and costs over $5000:

• architects
• engineers
• building designers
• building services designers - design heating, cooling systems for buildings etc
• builders - only applies to builders who contract with the owner and are responsible for carrying out the works, eg project managers
• building surveyors

Do I have to use an accredited building practitioner?

Under the Building Act 2000 owners must ensure that any persons they engage to design, build or as their building work is accredited.

A list of accredited building practitioners is available from the Workplace Standards Tasmania website.

Contractors who carry out the work of a building practitioner and are not accredited, are committing an offence and may be prosecuted and fined up to $10,000.

These laws do not apply to genuine owner-builders who may use a non-accredited builder, provided they comply with the laws relating to owner-builders.

Benefits of using an Accredited Building Practitioner (ABP)

ABP's are accredited by the Tasmanian Government who ensures that certain standards and requirements are met.

Benefits to consumers who engage ABP's include:

• Practitioners hold all appropriate insurances
• They are skilled, experienced and knowledgeable in their profession
• ABP's are required to keep their trade and business skills and industry knowledge current through compulsory Continuing Professional Development (CPD)
• Practitioners are subject to random checks (audits) on their compliance with the Building Act 2000 and the conditions of their accreditation
• ABP's are aware they must comply with a Code of Conduct of accredited building practitioners.  The Code measures the professional conduct of practitioners
• Consumers can lodge complaints against an ABP for alleged unprofessional conduct or professional misconduct.

How do I know if I am using an Accredited Building Practitioner?

All accredited practitioners have a unique accreditation number starting with 'CC'.

One of the first questions you should ask your practitioner is 'are you an accredited building practitioner?'

If you have any concerns you can also check the list of Accredited Building Practitioners on the Workplace Standards Tasmania website.

Further Information

More information is available from the Workplace Standards Tasmania website.

Click here to obtain a copy of the Are You Using An Accredited Building Practitioner brochure

 You will need a PDF viewer such as Adobe Reader to view PDF documents. Please contact us if you have difficulty viewing or printing the document.

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OWNER-BUILDERS

There are a number of restrictions on owner-builders and certain steps you must follow if you plan to become an owner-builder.

Am I an owner-builder?

There are a number of criteria that you must satisfy to be a lawful owner-builder, including:

• not being in the business of building
• being the owner of the land, and
• not having constructed more than two buildings in the last 10 years

There is also a set of guidelines that you must read and a form (Owner Builder Statement) you must complete and provide to your building surveyor, prior to commencing any work.

Housing Indemnity Insurance
Prior to 1 July 2008, if intending to sell, an owner-builder was required by law to take out housing indemnity insurance.  The law has now changed and this insurance is no longer compulsory in Tasmania.

Other Insurances
Owner builders should have the appropriate workers compensation and public liability insurance and provide the names of the insurance providers, the policy number and the expiry date on the Owner Builder Statement. If these insurances are not applicable, then they should write ‘not applicable’ on the form and explain why.

If you intend to engage workers to assist you in the construction you will be required to hold workers compensation insurance unless the person you have engaged holds their own workers compensation insurance. Public liability insurance will almost certainly be necessary in all circumstances. Seek advice from an insurance agent or broker if you require advice on insurance.

Further Information

More information is available from Workplace Standards Tasmania.  Click here to obtain copies of an Owner-Builder Kit and Building? Owner-Builders - Do You Know Your Responsibilities?

  You will need a PDF viewer such as Adobe Reader to view PDF documents. Please contact us if you have difficulty viewing or printing the document.

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PLANNING, BUILDING AND LOCAL GOVERNMENTS

Some of the core activities of local government are to regulate:

• the use and development of the land in its municipal area; and
• the construction and alteration of buildings

Planning Process

The planning approval process regulates 'use' and 'development' of land by assessing proposals against council planning schemes and the State's planning legislation. It particularly examines the impact of the proposed development or use on the surrounding area.

Generally, a Planning Permit is required before undertaking any use or development of land. Applications for a Planning Permit are assessed against your local council planning scheme and the State's planning legislation.

The Planning Permit application process is detailed in the Guide to the Resource Management Planning System.

You should always contact your local council to find out whether you need planning approval for any use or development you might be considering.  Council will be able to advise whether a Planning Permit is required first before you make a Building Permit application.

Building Approval

The Building Permit process regulates the construction and alteration of buildings by assessing proposed construction or alteration work against the requirements of the building legislation and the Building Code of Australia (BCA).

A Building Permit is required for the vast majority of structures and buildings with the exception of some minor works. Plumbing permits are also part of the building permit process.

You should check with your local council before commencing any building, plumbing, demolition or repair works. 

Further Information 

For further information about planning and building requirements you should contact your local council.  A full listing of Tasmanian councils is available at www.lgat.tas.gov.au   

ANY QUESTIONS 

If you have questions regarding the information on this website, please call the Consumer Affairs Hotline on 1300 65 44 99 or email to consumer.affairs@justice.tas.gov.au 

USEFUL PUBLICATIONS 

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